A Houston entrepreneur has joined the recent wave of creative auctions by attempting to sell off minority ownership in his online company through the eBay auction service. Neal Verma put Priceman.com, Inc. on the block shortly after midnight Tuesday, seeking to raise $10 million (US$) for a 47.39 percent stake in the company. The auction runs until next Tuesday.
“Be your own venture capitalist and acquire a stake in Priceman.com, Earth’s biggest shopping comparison engine!” reads the pitch line on Verma’s eBay listing for the share.
Selling or Marketing?
With a minimum starting bid of $10 million, it is unclear whether Verma’s auction is a tactic to avoid the traditional means of raising cash from outside investors — the highly volatile stock market or the overwhelmed venture capital market — or a marketing stunt to raise awareness of the company.
On the auction listing page, Verma reassures potential buyers that if they buy the stake via eBay, they will get a chance to resell it next year. “We are offering an exit strategy for this investment by way of a hopeful public offering in nine months,” he says in the listing’s product description.
According to a visitor counter, the auction attracted more than 100 visitors Wednesday morning. There were no bidders as of press time.
“I decided to take an unconventional route and see if I could raise capital through an auction site like eBay,” said Verma, who founded Priceman.com last year with his friend Neil Samuel. “If this works, it could open up a whole new way for companies and individuals to help startups find the capital they need to grow. It would really create a new avenue for startups to get cash and for those who have the cash, to find startups to put money into.”
Finding a Niche
Where is such a unique sale listed on eBay, where millions of items are offered daily in more than 1,600 categories? For lack of a more specific category, the Priceline.com share is listed in “Miscellaneous: Business, Office,” along with such oddities as a bank vault, 50-foot rolls of bubble wrap and a Samurai sword.
Priceman.com is an Internet shopping comparison engine. The site uses shoppers’ preferences to search categories such as Computers, Electronics, Fashion, Gifts, Books, Music, Sporting Goods and Toys, and it provides price comparisons and information on product availability.
Priceman searches more than 30 price engines on the Web, including auctions and classified ad sites, and claims to be the Internet’s largest price search site.